Flicker of hope as China, India rebound
BY DAVID HASSALL | 11th Mar 2009
Although too soon to call a global recovery, the figures are the first sign of an upturn and will gladden the hearts of embattled car-makers around the world.
India’s passenger car sales grew for the first time in five months (rising 22 per cent) in response to a cut in lending rates, but commercial vehicle sales declined by 32 per cent.
Ten of India’s 13 car-markers posted gains, and two – Maruti Suzuki and Hyundai – set records, according to figures released on Monday by the Society of Indian Automobile Manufacturers.
China surpassed the US as the biggest car market in the world almost by default last month, but the China Passenger Car Association reported on Monday sales of 607,984 passenger cars in February, up from 456,901 in February 2008.
Official market figures released last night by the China Association of Automobile Manufacturers show total vehicle sales of more than 800,000 units for the first time in eight months.
As well as selling 827,600 units in February, vehicle production in China also rose in February - by 23.1 per cent to 807,900 units.
The CAAM figures point to a significant response to government sales incentives, including halving the purchase tax on cars with engines smaller than 1.6 litres, from 10 per cent to 5 per cent.
Sales in Germany also rebounded in February in response to a $100 billion government program offering a scrappage bonus of about $5000 for cars over nine years old and other countries are offering similar subsidies to boost sales of new cars.
Embattled US automakers General Motors and Ford have both raised their forecasts for China, saying the market will rise this year by up to 10 per cent.
GM China, which will launch 10 new models in the next two years, had previously predicted the Chinese market would grow by only three per cent.
Ford expects to exceed the industry growth rate in China after exceeding sales expectations for its recently launched Fiesta light car by 17 per cent in January and February.
Last year, the Chinese market recorded single-digit growth after a decade of double-digit growth, but the market appears to have responded to government incentives aimed at encouraging buyers to trade polluting vehicles for more fuel-efficient ones.
Passenger car sales in India rose to 115,386 in February after the government dropped car-loan rates to 10 per cent and sales of motorcycles (which account for 85 per cent of the market) were also up, by 15.6 per cent.
Although truck and bus sales slumped again (to 31,069 units) due to the economic downturn and a dip in freight business, analysts expect they will pick up soon as businesses and fleet operators take advantage of the government increasing the rate of depreciation from 15 to 50 per cent.
India’s three dominant local car-makers recorded substantial gains in February, with Muruti-Suzuki up 21 per cent to 62,449 units, Hyundai gaining 45 per cent to 21,212 and Tata Motors rising 15 per cent to 15,524.
Even GM, despite being on a US government cash lifeline, had reason to celebrate with Indian sales of its Chevrolet Spark and U-VA hatchbacks rising by 19 per cent in February.